When the Fed lowers rates below inflation, many taxpayers think they need to set aside more short term reserves as the return on cash has dropped. They write to Congress to reduce taxes, and Congress thinks taxes will not support flow. The effect is temporary, after a couple of quarters, Congress recalibrates the real sustainable flow. The real sustainable flow is decreasing, but not as much as the taxpayers think when rates are low. The Fed effect is a short term volatility on government planning of a few quarters.
Congress is learning that they are in real trouble. The Fed just recites backwards poetry. But it is not the Fed that causes a permanently increasing losses from government, the Fed just induces short term volatility. Congress worries to much when the Fed sets rates low and worries to little when the Fed sets them too high. It is backwards, in the short term, from standard thinking. But the long term trend of increasing government unsustainability is real.
Thursday, February 13, 2014
So, is Obamacare inflationary?
If Obamacare causes part time work to be priced in then Obamacare is inflationary to the consumer. The private sector is creating a Bell curve where Obamacare had made skew to the left. The private market always moving the new Bell to the right as government losses uncovered. When Obama delivers a mandate delay, that is a correction and is deflationary to the consumer.
On net, comparing the before Obamacare to the settled Obamacare, the effect is deflationary with respect to part time work.
On net, comparing the before Obamacare to the settled Obamacare, the effect is deflationary with respect to part time work.
Wednesday, February 12, 2014
The Bell and adaptions of probability distributions
Economic folks want to do the Solow, great fun. I do it in spectral space by looking at probability distributions changes. I know that the bell gets the optimum Euler adjustment, so I am in Euler space. How does on Bell warp into another Bell in response to a shock.
Consider the distributions of students by grade ranking. If it moves from a positive technology shock that reduces college costs, what happens? Well, the shock puts a Bell on the low end, a positive supply boost to the student, but stable production of college graduates. A Bell on the left. The Bell ends up with lower prices, but in its intermediate states pays a slight adjustment cost, inflationary. The final Bell is wider, not narrower. The system has gained in bandwidth, the dead cat bounces are more mild.
In my mind, I am relating know variations in a time series from a probability series, sort of known translations from probability to time. Wider distributions have less volatility in time, this is a greater bandwidth effect. Then Euler is Bell. Upward sloping to the right is positive semi stable in time. Entries to the left, exits to the right, when the right is downward sloping.
Consider the distributions of students by grade ranking. If it moves from a positive technology shock that reduces college costs, what happens? Well, the shock puts a Bell on the low end, a positive supply boost to the student, but stable production of college graduates. A Bell on the left. The Bell ends up with lower prices, but in its intermediate states pays a slight adjustment cost, inflationary. The final Bell is wider, not narrower. The system has gained in bandwidth, the dead cat bounces are more mild.
In my mind, I am relating know variations in a time series from a probability series, sort of known translations from probability to time. Wider distributions have less volatility in time, this is a greater bandwidth effect. Then Euler is Bell. Upward sloping to the right is positive semi stable in time. Entries to the left, exits to the right, when the right is downward sloping.
Icards and Iphones
Sell them both with subscriptions. You buy this smart card, then you earn the inflation rate up to a thousand. With that idea;, Apple could sell smart Icards all day long.
Do not let Apple hear about this.
The Smart Card stabilizes short term reserves for every one, a huge gain in the efficiency of short term reserves. They offer a sudden breadth in the measuring efficiency in a mutli currency cash system with extremely low transaction costs.
A big win all the way around, really helps the poor, disciplines government and other volatility producers.
Some cryto currencies encoded with taxpayer ID, the government can collect consumption taxes in the open, but the fed can ensure inflation indexing of cash. Government collects a fee for managing user accounts.
The Smart Card, with its variety of money is a sweeping technology change, offering greater inventory balance over much long sequences of transactions. Inventory accuracy propagated by industrial web bots, and their mechanical enablers. A big one.
Do not let Apple hear about this.
The Smart Card stabilizes short term reserves for every one, a huge gain in the efficiency of short term reserves. They offer a sudden breadth in the measuring efficiency in a mutli currency cash system with extremely low transaction costs.
A big win all the way around, really helps the poor, disciplines government and other volatility producers.
Some cryto currencies encoded with taxpayer ID, the government can collect consumption taxes in the open, but the fed can ensure inflation indexing of cash. Government collects a fee for managing user accounts.
The Smart Card, with its variety of money is a sweeping technology change, offering greater inventory balance over much long sequences of transactions. Inventory accuracy propagated by industrial web bots, and their mechanical enablers. A big one.
The Six United Nations of America
The USA, break it up into larger chunks, six of them. Easier to do?
Congress, simply delegate the requirement for regional democracy, six capitals. Simple. why not? Force the small yokel states to regionalize smarter with regional legislators. Make it mandatory, and materialize it with regional cash flow from DC to the regions.
Buys time until the next census.
Congress, simply delegate the requirement for regional democracy, six capitals. Simple. why not? Force the small yokel states to regionalize smarter with regional legislators. Make it mandatory, and materialize it with regional cash flow from DC to the regions.
Buys time until the next census.
The Mish theory of inflation can be confusing
His complaints about losses from government. Would make government inflationary. He also accuses the Fed of being inflationary. But the inflation is masked from the consumer. Who does he claim for the masking? I say the fed is disinflationary to the consumer. Bubbles are mostly caused by liquid markets removing Fed deflation. Does the Fed enable government caused inflation? Government owns the fed. But the volatility caused by the Fed pales compared volatility of government. Price changes up are government caused unplanned losses, mostly. The consumer adjusts, mostly as the fed deflates the short end and causes reduced returns on reserves. The consumer responds immediately with a bit of reduced purchases, lower prices, and reserve replacement, usually from the money markets or stocks.
Reduction in purchases is deflationary, but the consumer should adjust, yielding a small price decrease and slightly lowered goods flow to compensate for the inefficiency of translation, a low cost but significant.
Horribly unfair to low income houses who don't have efficient demand deposit returns. They hold cash mostly, returns on short term reserves hammered. They can price adjust, but no easy access to efficient money markets makes adjustment slow and painful.
The fraud is ongoing and increasingly deceptive making uncovered losses increase in volatility, not unplanned.
But we got it cornered, in my opinion, judged, juried, and hung.
The most harmful thing to the poor.
Please make this fix.
Illiquid benefits to replace liquid benefits. Making all benefits liquid in cash, first. Do it with neutrality, but do it. All benefits come in the government smart card and the card is contractually required to pay the quarterly inflation on cash.
Reduction in purchases is deflationary, but the consumer should adjust, yielding a small price decrease and slightly lowered goods flow to compensate for the inefficiency of translation, a low cost but significant.
Horribly unfair to low income houses who don't have efficient demand deposit returns. They hold cash mostly, returns on short term reserves hammered. They can price adjust, but no easy access to efficient money markets makes adjustment slow and painful.
The fraud is ongoing and increasingly deceptive making uncovered losses increase in volatility, not unplanned.
But we got it cornered, in my opinion, judged, juried, and hung.
The most harmful thing to the poor.
Please make this fix.
Illiquid benefits to replace liquid benefits. Making all benefits liquid in cash, first. Do it with neutrality, but do it. All benefits come in the government smart card and the card is contractually required to pay the quarterly inflation on cash.
ECB to make goods flow backwards
WSJ: FRANKFURT–The European Central Bank is “seriously” considering taking its rate on overnight bank deposits into negative territory, a top member of its executive board said Wednesday, adding to mounting speculation that the central bank will act at its next policy meeting to keep the tepid euro-zone economy on track.
“[Negative rates] is something we are considering very seriously,” Benoît Coeuré, ECB executive board member, told news agency Reuters in an interview, adding that it is “a very possible option.”
The ECB confirmed Mr. Coeuré’s remarks.
More details of the plan were released today. Evidently, owners of Mercedes Benz autos would be required to drive backwards to the factory and have their cars disassembled, putting the parts back into inventory.
Is government continually inflationary with respect to the dollar?
Folks get confused about this. First, ask the question, is government increasingly volatile over times. The answer over the last forty years has been yes. Hence, if reserves government needs to set aside to cover the volatility increase over time. Let's assume we count reserves in terms of the dollar, and since the government owns the Fed, government can order a continuing increase deflation of the dollar to maintain reserves. That is why the governments effective interest rate declines over time. Real gdp drops, but nominal gdp drops faster. Hence the nominal dollar buys more real goods, except real goods flow are declining. So the nominal dollar flow declines faster.
So even though government volatility is increasing, real goods flow decline faster to compensate.
Why do we have real growth again? See the chart, the federal government is shrinking fast. It is shrinking faster than growth. How long can the federal government keep dropping in relative spending? In other words, what is the stable outcome. The outcome is a balance between the small states that want discretionary spending and the large states that don't. We shall see.
So even though government volatility is increasing, real goods flow decline faster to compensate.
Tuesday, February 11, 2014
Who is the Fed really stimulating?
Take a look. In every contraction, inflation still high, unemployment low, but deficits rising. What does the Fed do? They lower rates to help Congress pay its bills. The Fed's job is to help Congress cause recessions a little sooner and make them last a little longer. It is stimulus only in the sense that we see government volatility sooner than we would otherwise.
Subscribe to:
Posts (Atom)